Doing business in Pakistan is certainly a huge opportunity which no one should miss, a country with 200 million people, more than 60% is youth, But, it’s not always convenient when anything comes down to working with Government offices and dealing with all sorts of “Sarkari” people. if you know what i mean 😉
Since, it’s confusing and deeply concerning because starting a business is not, and should not be taken lightly. And unluckily there is not much information available on the internet about company registration in Pakistan. So, we have compiled all the key information that you need to know to legally start a new business or to register a new company anywhere in Pakistan.
Types of Companies
There are few type of companies and its critical to take an informed decision.
- Sole Proprietor
- Private Limited
- SMC (Single Member Company)
SECP (Securities Exchange Commission of Pakistan)
SECP is regulatory authority for Private Limited (also known as Pvt. Ltd. or limited company) registration. Recent governments has improved the process to ease company registration but whenever government do something is not always truly* beneficial for you if you are not well informed or didn’t had expert advice on the subject.
Company Registration/Incorporation are regulated under Companies Ordinance 1984.
According to SECP
“A company is a corporate body with separate legal entity and a perpetual succession. A company may be formed by persons associating for any lawful purpose by subscribing their names to the Memorandum and Articles of Association and complying with other requirements for registration of a company under the provisions of the Ordinance”.
3 types of Companies According to the Companies Ordinance, 1984
A company limited by shares
A company limited by guarantee
An unlimited liability company
Below are the necessary steps for Formation, Incorporation and Registration of a Company in Pakistan
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Step 1. Company Name Reservation / Registration
Choose a Great Company Name
First step is to look for company name availability and you always start from a great name and there few key thing which should not be overlooked;
What’s the Big Deal with Company Name?
Company Name is first thing that people know about your business and always remember
“First Impression is the Last Impression”
And how you render your service or deliver your products its matters greatly. A good company name can position your business amazing well or it can also turn your company into ultimate failure. So, your company’s bright future requires a well thought out Great Name.
- Think about your Customers first
Always try to find a Company Name which is self explanatory to your Customers and can communicate about your product / service and confidence.
- Respond with emotional level
A business is great which can engage people with happiness as human’s ultimate to be happy just always wins.
- Long and confusing names are just not fit for your business
- Never use names that only you or your family & friends can understand
- Never use the word “Pvt. Ltd.” in the end of your Company Name unless your company is registered with SECP
Come up with the name which is creative, concise, reflect your core business, attract your potential customers, relate to to people.
Or Call Us to Help you with name and every step to get you started.
Once you have a great name for your business it’s time to check for name availability with SECP. In theory, it’s a simple process but making it work in real life can be little challenging because mostly it depends on the mindset of the on duty officer to approve certain names.
Marketed names are often Trademarks and marketed name can differ from your legally registered Company Name.
Prohibition of certain names
(1) Subject to section 10 of the Act, the following words and combinations thereof shall not be used in the name of a company in English or any of the languages depicting the same meaning
(i) Federal Government, Provincial Government, Name depicting association with any foreign government, Name suggesting association with any political personality, Commission, Authority, Register or Registered, Co-operative, Bureau, Division, Department, Undertaking, Municipal, Union, Republic, Nation, President, Governor, Prime Minister, Chief Minister, Minister, Cabinet, Senate, National Assembly, Parliament/ Parliamentary, Statute/ Statutory, Court/ Judiciary/ Judge, Administrator.
(ii) Names of International bodies and abbreviations thereof including, but not limited to, United Nations, South Asian Association for Regional Cooperation, Organization of Islamic Page 3 of 22 Conference, World Bank, International Finance Corporation, Asian Development Bank, Islamic Development Bank, International Monetary Fund, Red Cross, Red Crescent. Provided that the Commission may allow any of the above names under special circumstances on the request of any government or authority.
Subject to section 10 of the Act,
the following words and combinations thereof may only be used in the name of a company subject to the criteria mentioned in each case,
(i) Association or Foundation – In case of companies to be established on grant of license by the Commission under section 42 of the Act or which are licensed by the Directorate General of Trade Organizations under the Trade Organizations Act, 2013.
(ii) Fund – In case of a public sector company, a trade organization, a Non-Banking Finance Company to be established to undertake asset management services or private equity and venture capital fund management services subject to prior approval of the Commission or a company to be established on grant of license by the Commission under section 42 of the Act. (iii) Council – In case of a company to be established on grant of license by the Commission under section 42 of the Act. Moreover, this expression may also be allowed to Sports Association, Trade Organization or a Professional Body.
(iv) Chamber – In case of an entity which is to be established as a Trade Organization under Trade Organizations Act, 2013.
(v) Trust – In case of Non-Banking Finance Company to be established to undertake REIT management services or asset management services subject to prior approval by the Commission.
(vi) Society – In case of a company if proper justification is provided to the satisfaction of the registrar.
(vii)Assurance/Assurer/Insurance/Insurer/Re-Assurance/Re-Assurer/Re-Insurance/Re-Insurer – In case of companies to be established to undertake business of Insurance, Assurance, Reinsurance and Re-assurance subject to prior approval of the Commission.
(viii) Board – In case of a company desirous to engage in the business of Paper and/or Board or to public sector companies.
(ix) Bahria/Askari/Fauji/Fazaiya/Cadet/Armed Forces or Forces/Army/Navy/Air Force/Shaheen/Military/Defence – In case of companies to be established by the relevant agency.
(x) Bank/Banking/Banker – In case of companies to be established to undertake banking business subject to prior approval of State Bank of Pakistan or an investment bank subject to prior approval of the Commission.
(xi) Charter/Chartered – In case of companies having charter from the sovereign authority of the Federation or the Province.
(xii) Corporation – In case of companies where proper justification is submitted to the satisfaction of registrar.
(xiii) Exchange/Bourse – In case of Securities Exchange, Commodity Exchange, Mercantile Exchange and Exchange Company, subject to prior approval from the relevant authority.
(xiv) Familiar Trade Names or Brand Names – In case of a company where permission of familiar trade name or brand name user is provided or proper documentary evidence of ownership/ use of trade name or brand name is furnished by the applicant to the satisfaction of the registrar.
(xv) Famous/Distinct Personalities – In case of a company where proper justification is submitted to the satisfaction of registrar.
(xvi) Federation – In case of a company licensed under section 42 of the Act or trade bodies under Trade Organizations Act, 2013.
(xvii) Federal – In case of a company where it has a connection with or patronage of the Federal Government subject to prior approval of the Commission.
(xviii) Province/Provincial/Sindh/Punjab/Baluchistan/Khyber Pakhtunkhwa or KPK/FATA/Gilgit Baltistan or FANA/ Azad Jammu & Kashmir or AJK. In case of a company where it has a connection with or patronage of the concerned Government subject to prior approval of the Commission.
(xix) Group – In case of a company where this word implies several companies under single corporate ownership and applicants have to provide evidence of subsidiary/associate relationship with two or more companies.
(xx) Holding – In case of a company where it qualifies to be a holding company as defined in clause 37 of sub-section (1) of section 2 of the Act to the satisfaction of the registrar.
(xxi) Institute/Institution – In case of a company where it has submitted proper justification to the satisfaction of the registrar.
(xxii) Finance, Financial, Investment Finance, Investment Advisory, Leasing, Asset Management, Housing Finance, Modaraba, Venture Capital, Private Equity – In case of Non-Banking Finance Company, investment company, Modaraba company, brokerage house subject to prior approval by the Commission. In case of any public sector financial institution subject to prior approval by the Commission or State Bank of Pakistan, as the case may be.
(xxiii) Name of Company containing country name or nationality other than Pakistan – In case of the companies where appropriate justification is submitted to the satisfaction of the registrar. (xxiv) Name of Company containing names of two countries i.e., Pakistan/Pak and any other foreign country – In case of companies where documentary evidence is provided to the satisfaction of the registrar to support the fact that the company is a Joint Venture of two Governments or companies of two countries.
(xxv)New/Modern/The/Al/International/Company/Co./Inc./Firm/Partnership/LLP/LLC/Proprietor/ Enterprise/Mills/Factory – In case of a company where proper justification is submitted to the satisfaction of the registrar. However, these expressions will not be acceptable if used to make proposed company name distinctive from existing companies. (xxvi) State – In case of public sector companies.
(xxvii) University – In case of University Management Company for the management of University in terms of guidelines of Higher Education Commission.
(3) The name shall be considered undesirable,
if— (i) it includes the name of a registered trade mark or a trade mark which is subject of an application for registration, unless the consent of the owner or applicant for registration of the trade mark, as the case may be, has been obtained and produced by the promoters;
(ii) it includes any word or words which are offensive to any section of the people;
(iii) it is identical with or resemble or similar to name of Limited Liability Partnership registered under the Limited Liability Partnership Act, 2017; (iv) any other word which in the opinion of registrar is undesirable.
Online Company Name Search
To check if your decided company name isn not already taken or you need to check Company Name with SECP. Fortunately SECP has online Company Name Search option. And you can do this right now.
2. Type your company name (Whatever name you want for your company)
3. If there is no company with your searched name and it also comply with above described SECP regulations. You are all set.
IMPORTANT: SECP requires you to at least propose 3 options for your company.
In our last 20 years of experience, we have dealt with various complicated cases sometime SECP disapprove your proposed certain choices and in other case they tend to approve exactly same type of names. Well, it’s dicey.
Apply for Company Name Reservation / Registration
To apply for Company Name reservation or registration you can go to online and do it by yourself.
- Never try to use any other browser but Internet Explorer (Not Microsoft Edge)
- Process submission does not work with Internet Explorer (it works with Safari 8)
- Chrome simply doesn’t work
- Never call there technical helpline (NIFT) they just doesn’t have clue what are they up to.
You can go to any SECP Office and work your way out or you can be smart and let professionals do their job.
Contact Us and our professional team will help you register you company, open company bank account, register NTN number and take care of all the legal concerns.
But, if you still want to do it yourself here’s how you do it.
And submit it with an application for company registration at the designated branches of MCB or UBL in Pakistan.
Step 3. Form 21 - Office Address for Official Communication with SECP
Step 4. Form 29 - Information about all the Directors / Subscriber / Other
CNIC / NICOP photocopies of all directors/ subscribers / chief executive officer / nominee (for single member company)/authorized representative or copies of Passport in case of a foreigner.
Step 5. NOC / Foreign Company (If Applicable)
- NOC (If applicable) – NOC/ Letter of Intent/ License (if any) of the relevant regulatory authority in case of a specialized business, such as logistics, import export, other.
- For Foreign Company (If applicable) – In case the subscriber is a foreign company, the profile of the company, detail of its directors, their nationality and country of origin, certified copy of its charter (certified copies can be obtained from respective regulatory authority), statute or memorandum and articles etc.
Step 6. Memorandum of Association (MoA) & Article of Association (AoA)
- Copies of the Memorandum and Articles of Association with each member’s signature.
Memorandum of Association (MOA) explains the business industry of your company e.g. Ceramics, Institution, Travel agency, Trading or manufacturing, Consulting, Supply or chain of stores. In simple words MOA is the details of yours company with its clients. And developing an Memorandum of Association which covers your core business as well as all the future prospects is important thing for every business.
Articles of Association (AOA) is the details about the day-to-day proceedings within the company i.e. roles CEO and directors, business concerned meetings, HR etc. in short- how the company will run. And Memorandum of Association is required to be in compliance with Article of Association (AOA).
Step 7. Submit all Document (Online / Offline)
If you have completed all the documents you can apply through Online or Offline, the only difference Online and Office are following;
Pros & Cons of Online and Offline Methods
You have online access to your official company information.
Online services are often down or have technical problems.
All your communication will be received at your email address and its easier to stay updated.
You will have to stay active with email communication and always check spam folder because mostly SECP email marked as Spam.
Less fee of company name reservation challan and other processes.
There is No problem with paying less.
You can sign your documents / requests online. (Extremely valuable for companies with director in different regions or always on the move)
Only certain versions of Internet Explorer support these java Applets and its hassle to make it work.
Information transparency between directors about company status or other affairs.
For companies with many directors or variant roles or business arrangements, sometime this feature does more damage than good.
Known process by the existing people, your staff and SECP staff.
Many old staff members at SECP also lack understanding about online registration process and its dynamics. So, at times it becomes tricky to deal with them.
There is nothing good paying more fee.
You pay extra fee on Company Name reservation and other processes.
Documents trail stay intact and aligned because everything is processed manually.
Nothing is in the air.
Official communication (with SECP) can be delayed because of manual delay in post service or otherwise. Or due to negligence of any staff member